Herbal supplement sales hit $5.3 billion, ABC report says

A report in the latest issue of HerbalGram, the publication of the American Botanical Council, shows herbal supplements sales in all channels hit $5.3 billion in the United States in 2011, representing a healthy 4.3% increase from 2010.

Sales in the mass channel increased by almost 3% while sales in the natural channel increased by 5.5% according to the report.
That’s the good news.

The equivocal side of the coin is that, correcting for inflation (which the ABC report does not do), the average rate of sales growth of herbal supplements in the 2000-2012 time frame roughly matches the rate of inflation for the same period, or somewhere between 2 and 2.8 percent per annum. Which is just fine by Mark Blumenthal, ABC’s founder and executive director and one of the authors of the study.

“Frankly I’m OK with that. The lack of explosive growth is not a problem for me because I’ve never been one to promote faddism. My preference of for slow, steady incremental growth,” Blumenthal told NutraIngredients-USA. The growth in 2011, Blumenthal said, “is fairly compelling and it speaks to the consumer’s commitment to a dietary supplement agenda and to the herbal sector.”

Sales grow despite hard times

Blumenthal said the recent robust growth is all the more impressive considering macro economic trends.

"These sales data indicate continued strong consumer demand for herbs and other natural plant-derived ingredients as an essential part of their self-care," Blumenthal said. "What is even more remarkableis that herbal supplement sales grew while the economy is still considered in recession, a sign of how highly American consumers value these safe, low-cost materials."

The ABC report was based on sales data compiled by market research firms SymphonyIRI, and SPINSscan Natural as well as numbers supplied by Nutrition Business Journal. The data from the research firms omits Walmart in the mass channel and Whole Foods Markets in the natural channel.

The 5 top-selling herbal supplements of 2011 in the health and natural foods channel, according to SPINS, were flaxseed oil, wheat and barley grass, turmeric, aloe and milk thistle. The top-selling herbal singles of 2011 in the food, drug, and mass-market channel, according to SymphonyIRI, were cranberry, soy, saw palmetto, garlic, and ginkgo leaf extract. The data aren’t strictly analogous, as the two firms categorize products slightly differently.

Blumenthal stressed he’s no fan of demand bubbles. As an example of what can happen, he pointed to the huge spike in herbal supplement sales in 1997 and 1998, when a couple of large players, like Warner-Lambert, later purchased by Pfizer, got into the game with extensive herbal product lines backed by big marketing campaigns. Sales skyrocketed and then fell just as fast.

Raw material picture

The trend in retail sales is mirrored in the figures compiled by the American Herbal Products Association
in their recently released tonnage survey. The survey compiles data collected from buyers who purchase product out in the field, mostly from wildcrafters but also from growers. It covers fewer herbs than does the ABC report, but gives a peek into the raw material picture, at least for herbs collected in North America (much of the raw material that went into the supplements detailed in ABC’s report comes from foreign suppliers, of course). The figures show moderate rises in the harvest of black cohosh, slippery elm and echinacea in 2010, the most recent year for which figures were available, all coming in at about 160 tons of dried material. Figures for saw palmetto, another high volume herb, were less reliable in the 2006-2010 time frame as one of the companies declined to participate in the survey.

The message seems to be there is plenty of herb out there to meet demand, and when tonnage totals drop off sharply it’s not a matter of shortages. For example in the overheated period mentioned above, harvest of echinacea peaked at 306.2 tons in 1999. It fell to just 46 tons a year later. Demand drives supply in this scenario.

“This huge drop off wasn’t because we were running out of echinacea,” said Steven Dentali, PhD, AHPA’s chief science officer who coordinated the survey.

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A report in the latest issue of HerbalGram, the publication of the American Botanical Council, shows herbal supplements sales in all channels hit $5.3 billion in the United States in 2011, representing a healthy 4.3% increase from 2010.